Prepaid Cards Offer Families A Financial Solution

(NAPSI)—Millions of Americans nationwide prefer the anywhere,
anytime convenience of a prepaid card for money transactions versus a
traditional bank checking account. Payroll deposits, tax refunds, Social
Security and other government benefits, as well as cash, can be received on a
prepaid card.

Consumers store their money, shop online, make purchases at stores and
restaurants anywhere, withdraw cash and pay bills electronically, and have
access to millions of ATMs worldwide...all without the fear of being overdrawn
and without a bank credit check.

Prepaid cards can enhance a familyâs financial well-being, according to a recent study. Cards are regularly used to pay bills online, over the phone and to make point-of-sale purchases such as groceries and gas.

Prepaid cards are commonly referred to as prepaid credit cards but
function more like a debit card than a credit card. Credit cards extend a
line of credit to cardholders, whereas prepaid card users can only spend what
they deposit to their card account, which can be done automatically by
payroll direct deposit or at any number of retail stores providing money
transfer services such as MoneyGram. Many people say it helps them to control
their spending and stick to a budget.

The Center for Financial Services Innovation (CFSI) studied the features
and benefits offered by prepaid card companies. The study looked at how
consumers use prepaid cards and whether the cards help financially
underserved consumers manage their money.

Reloadable prepaid cards function like electronic bank accounts without
checks. Consumers load funds on the card and can spend only what they load,
limiting the risk of overdraft while providing immediate liquidity.
Transaction costs are low and many providers are adding features, including
bill payment, money transfer, savings wallets and other new services.

The CFSI study found that such cards have the potential to enhance
families' financial well-being.

Consumers gave several reasons for
liking their cards:

Convenience: Cardholders do not
have to run to different places to cash a check, buy money orders and then
deliver payments. Apparently, the feds find them convenient, too. After March
1, 2013, Social Security, veterans and other federal benefits will all be
paid either by direct deposit to a bank account or to a reloadable prepaid
card.